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"The Holy Grail… Supply Chain Excellence" - Harold Geller

Sunday, February 13, 2011

Supply chain leadership means more than low costs and efficiency—it requires an advanced ability to shape and respond to shifts in demand with innovative products and services. Value chain performance translates to productivity and market share leadership.

When I think about efficiency, profitability, and growth within our industry, I immediately question our current practices. I am afraid we may be squandering opportunities for supply chain excellence.

When we digitize wherever we can, including using industry standards like Ad-ID and supporting other master data management efforts in place of proprietary and labor-intensive solutions, we put greased lightning on the entire supply chain. We can track and measure where our digital assets are going, and we improve efficiency across the board. A lack of alignment between assets creates more disharmony, as each party in the chain maintains incongruent definitions and conflicting hierarchies. But opportunities exist to create common information management practices, and until they are implemented, the ad's lifecycle will continue to be labor-intensive, duplicative, and vulnerable to errors.

What is master data management (MDM)? MDM is an approach to business records (including systems, processes, and applications) which standardizes business categorization and to help ensure a clear and accurate view of business and performance. A lack of MDM processes increases business challenges and decreases profitability and performance. Master data, as related to our needs, is the basic information on advertisers, brands, vendors, and other campaign details that need to be shared across all systems (internal and external), coordinating applications, and processes in order for business data to be consistently and accurately reported.

As advertisers and agencies, we always have a fear of letting go of information that some may consider confidential. But what we're talking about here is NOT proprietary; it's basic descriptive information — advertiser name, product name, commercial title, and a few more descriptive values. The data we're talking about is being shared today in analog methods that were invented over 30 years ago, when there were fewer media outlets, and a far less complex supply chain these can now be shared digitally.

There is always a concern that by identifying faults in your customer's processes, you will diminish your share of the overall budget. Realistically, this negligible amount that may be lost will be gained in other areas. When we take on such ventures, it is necessary to review all the components affecting the cost-benefit analysis. A small fundamental capital loss can cascade into a huge capital gain through supply chain excellence.

Excellence in the supply chain is when partners have fulfilled their roles, adhered to industry best practices, and made way for the other members of the supply chain to focus on their own roles. We need to shift responsibility to the right place in the supply chain, away from downstream parties who have no ownership or primary knowledge of the accuracy of the information. In fact, these downstream parties have been held responsible for errors. What we are talking about is the foundation of repeatable, documentable best practices.

Realistically, marketers, agencies, and the media are overwhelmed by an explosion of new data to process and analyze. This trend has been dubbed "Big Data"; we were once dealing in megabytes and now are dealing with terabytes. The expanded information now has more uses and affiliations, thereby rendering the current methods used to label it obsolete. This new data is organized by what could be hundreds of segmentations. Ultimately, our supply chain is limited by legacy technology systems. Our current industry structure leads to disparate data, conflicting hierarchies, and intended-to-be-temporary workarounds.

In our industry we have always lived with workarounds, short-term fixes, and stop-gap solutions. A workaround is defined as a bypass of a recognized problem in a system. It is a temporary fix that implies that a proper solution is to the problem is needed. Workarounds are considered frail in that they will not respond well to further pressure from a system beyond the original design. In applying a workaround, it is important to keep note of the change so at a later date a genuine solution can be implemented — something that we generally don't do. When practices evolve or advance, the workaround created to address a problem may break the overall functionality of the updated system in anticipation of the previous erroneous cause-and-effect pattern.

Our workarounds have graduated to permanent practices which have evolved into institutionalized bad habits which have become a barrier to innovation and creativity.

If we develop standard industry operating procedures ranging from how to get information into order entry, asset management, workflow to measurement systems then innovative business models will emerge, and cost savings will be generated — possibly even additional revenue.

Supply chain excellence relies on a company's ability to make decisions quickly and effectively. Furthermore, these decisions must be based on what is best for the entire supply chain, rather than one specific organizational component.

Harold S Geller is Senior Vice President, Cross Industry Workflow, American Association of Advertising Agencies (4A’s) and Chief Growth Officer, Ad-ID LLC - the industry standard for identifying Advertising assets across all media platforms - a UPC code for ads, which is a joint venture of the 4A’s and the Association of National Advertisers (ANA). Harold can be reached at hgeller@ad-id.org.